Posted
by
timothy
on Friday February 10, 2012 @08:34PM
from the but-they-love-you-at-heart dept.

coondoggie writes "A former Internal Revenue Service employee this week got 105 months in prison for pleading guilty to theft of government property and aggravated identity theft in a case where the guy tried to get away with nearly $8 million in fraudulent tax returns. The U.S. Department of Justice said Thomas Richardson used his inside knowledge of IRS operations to commit his crime, which was pretty audacious. According to the DOJ, Richardson admitted that within a two-day period, April 15 to April 17, 2006, he filed or caused to be filed 29 fraudulent 2005 individual income tax returns totaling $7,922,657."

The IRS can go straight to hell. Nowhere else in America are you guilty till proven innocent and due process does not exist. You can be put in jail with all of your assets seized, which greatly inhibits your ability to defend yourself. Unless they really do charge you criminally, you are not provided with a defense in a case where you already guilty.

Add to this the fact that the average IRS is a fucking retard when it comes to accounting, tax laws, corporate structures, etc. and they still have the ability to outright destroy your ass with their ignorance, in many cases with no oversight or accountability .

I speak from experience. When you are in an oil and gas state and you can get some arrogant sociopathic retarded fucktwat from several states away who thinks he knows about your industry better than accountants and regulators and incorrectly over charges you millions, it might piss you off. Just a little.

Fought it in court viciously for over 9 years at the cost of nearly a million dollars. In the end, other people in the IRS were finally brought in to audit it, and lo and behold, they were wrong the whole time.

Made those fuckers pay interest and on the wall in the office is a framed check from the IRS for well over 7 million dollars.

Rot In Hell.

I am not surprised at all by this. Not even the slightest. What I am surprised about is that they don't catch them doing it more often.

IRS needs to be completely razed to the ground and a new system put into place. No wonder I am big huuuuuggge fan of taxing consumption and not wealth. Not only is it passive to citizens, but a hell of lot easier to understand. Disagree with me for sure, but that fucking group of psychopaths needs to be taken care of.

Consumption taxes are not inherently simpler than income taxes. The core reason behind conservatives arguing constantly for a flat consumption tax is that they are tired of progressive taxes and really would prefer taxes to be regressive. It has very little to do with the IRS or your plight.

Consumption taxes are inherently regressive. Even if you manage to flatten them out with rebates, typically the middle class ends up paying the highest rate. Which is why, although I want a flat, across the board tax, I will never support a consumption tax.

No, they are inherently flat. Or, are you saying that a person who earns $50k a year is going to pay (for example) $1 in sales tax on package of toilet paper, but a rich guy is only going to pay $0.50 when he buys it? Does the rich guy get a discount on his toilet paper sales tax because he just paid a big pile of sales tax when he bought the fancier car, or services from a more expensive wedding photographer?

Or are you thinking of a sales tax as an income tax, and you're calling it "regressive" because

Ideally there would be no taxes, but they are a necessary evil for reasons better left for another day. It's regressive because poor people pay a higher percentage of their income to the government under a consumption tax. It imposes a greater burden on the poor then it does on the rich. That is basically the definition of a regressive tax.

Real regression would be poorer people paying more tax per dollar they earn (we call today's "progessive" tax rates progressive because the rate goes up per dollar earned). A flat tax is not regressive, it's flat. There's nothing regressive about everyone paying, say, the same ten cents on every dollar they earn or spend. No more than there is something regressive about everyone paying the same price for a gallon of skim milk.

So it doesn't bother you that poor people pay a higher percentage of their income in taxes?

You mean right now? They do not, because they don't pay any income taxes. Do you mean in flat tax scenario? No, it doesn't bother me any more than the fact that they also continue to pay (as they do now) a higher percentage of their income for shoes and socks, would also pay a higher percentage of their income for the services of a plumber, and would pay a higher percentage of their income for the services of their government. This is also true if you compare somone making $100k a year to someone making $2

So, let's talk about what you're really complaining about: you don't like the fact that some people make more money than other people.

No, I think those who make more money should pay an equal or higher percentage of their income in taxes. You clearly disagree. In fact, I think that you are a moron for thinking that poorer people should pay a higher percentage of their income in taxes. Life has already given them a harder time without the government needing to pile on too.

Fortunately your ideas are not going anywhere politically. Unfortunately, ideas like yours give flat tax a bad name, because people associate it with regressive sales t

I think that you are a moron for thinking that poorer people should pay a higher percentage of their income in taxes.

I don't. I think they should pay exactly the same rate on the dollars they earn as everyone else. But since you insist on looking at it in terms of their overall cash pulled in, rather than as a function of each dollar earned... do you think it's fair that a set of tires costs poorer people a greater portion of their annual income? Be specific.

I think those who make more money should pay an equal or higher percentage of their income in taxes

Which is it? Address the scenario I described. Should we two people, working the same job and generating exactly the same pay from that job, get different amounts

Except that there's nothing regressive at all about a flat tax. It's flat.

If poor people pay a higher percentage of their income as taxes, then it's regressive, even if you choose the name 'flat'. Sorry if you're too dumb to pick up that idea.

Please provide your moral reasoning for making the guy who works an extra twenty hours a week subsidize (through paying a higher rate per dollar) the lower tax rates of the guy who chooses to work only forty hours a week. Be specific in your justification for taking more of each dollar that the harder worker earns.

Do you understand how tax brackets work? Both people pay the same amount of tax on the first part of their income.

My point is consumption taxes are regressive. My point wasn't that all other tax systems are fair.

If poor people pay a higher percentage of their income as taxes, then it's regressive

How is paying 10% of your income regressive (relative to someone else, who makes more, who also pays 10% - but a lot more dollars)? You're still not being the least bit clear on this. 10% is 10%. A regressive tax rate would be a higher number the less you make.

Do you understand how tax brackets work?

Yes, though you seem to be avoiding the topic. If you work harder and make more money, more of every dollar you make is taken as taxes. That is a progressive tax system. The rate per dollar of income goes up as a function of the number of dollars yo

How is paying 10% of your income regressive (relative to someone else, who makes more, who also pays 10% - but a lot more dollars)?

That's not regressive. It's not what I said, either. I said, "If poor people pay a higher percentage of their income as taxes, then it's regressive." Which IS regressive.

Yes, though you seem to be avoiding the topic. If you work harder and make more money, more of every dollar you make is taken as taxes.

No, you are wrong. Check it out [wikipedia.org]. In the US, no one pays any taxes on the first $5,800 they earn. It doesn't matter how much they make, the first $5,800 are tax free. That is the first bracket (because of the standard deduction). After that, the next bracket they pay 10%, etc. No wonder you are confused.

What absurd sophistry. There is no "part" of your income. You pay based on your entire annual earnings. Period. The guy who worked the extra hours pays a higher rate.

I said, "If poor people pay a higher percentage of their income as taxes, then it's regressive."

You keep saying that, but you keep skipping over pointing out the part where anyone has proposed a higher income tax rate for someone making, say, $20k a year than for someone making $55k or $250k a year. In what scenario, current or proposed, are you seeing anyone propose such higher (than someone else pays) income tax rates for lower income people?

Poor people tend to spend all of their money just to survive (or because they don't know how to save). Which is why they have a higher burden, as a percentage of their income.

What are you referring to, here? The services they pay for in the form of, say, natural gas service to heat their apartment? The costs of getting a haircut? T

You keep saying that, but you keep skipping over pointing out the part where anyone has proposed a higher income tax rate for someone making, say, $20k a year than for someone making $55k or $250k a year. In what scenario, current or proposed, are you seeing anyone propose such higher (than someone else pays) income tax rates for lower income people?

You retard, do you not understand this? Do you constantly go around making yourself look like an idiot? Every sales tax in the world is regressive to some degree. It is easy to imagine why, although I have never met anyone who has as much trouble as you, figuring this out. Are you one of those people who has an IQ of 80? There must be some here on slashdot. Maybe you're just a troll.

Can you not imagine a 10% sales tax scenario, where someone makes $20k, spends all their money, and thus pays $2k in taxes

Unfair, because the poor guy you mentioned is paying a fifth as much in sales taxes? Unfair because the tax doesn't leave everyone with exactly the same amount of cash at the end of the year? You really don't think it's fair until the guy who makes $1 million is also left with no money at the end of the year?

What - specifically, in real numbers - is your standard of fairness for a sales tax, if not to apply it evenly, thus collecting more from people who consume more? And more to the point, why are you s

Yes, they work to make it so that next week, when you work harder than you did this week, more of each dollar you make is taken and used to pay someone else's share of the cost of having a government that everyone uses.

Life is hard, and unfair

And so your solution is to make two people who are standing right next to each other doing the same job pay different taxes on a given dollar the earn, because one of them also works a second job?

that doesn't mean the government needs to pile on and make it worse

Don't you see that that is exactly of what you seem to approve? The system you like - the one

No, you are wrong. Your first dollar will always be taxed at the exact same rate, no matter how much you make. That is how tax brackets work.

This is factually incorrect, and you know it. At the end of the year, when you actually file your taxes, you pay the higher rate for all of the money you earned, if you earned enough to put you in the higher bracket. Of course you know this, but you're pretending not to for some inexplicable reason.

Your taxes are based on the totality of your earnings. And if you earned a lot later in the the year, you'll also be fined for not having payed more in taxes early in the year. But again, you know this, much

This is factually incorrect, and you know it. At the end of the year, when you actually file your taxes, you pay the higher rate for all of the money you earned, if you earned enough to put you in the higher bracket. Of course you know this, but you're pretending not to for some inexplicable reason.

Are you always this dumb? Check it out [wikipedia.org]. "Essentially, [tax brackets] are the cutoff values for taxable income — income past a certain point will be taxed at a higher rate." I mean, this is something basic research could have shown you.

Are you also one of those people who believes that if you go up a bracket, your after-tax income could be less? Because that can't happen. Are you in some non-US country where tax bracket means something different?

That means that your income is taxed at a higher rate. When you go past the threshold, the number of cents taxed per dollar of all of your income will be higher when you sit down to file your taxes. Go ahead, fire up a copy of TurboTax, and run some numbers. Watch what happens. When you slip into the next bracket, your tax rate goes up, and the bottom line is that more pennies per dollar for all of your income are now taxed.

No, they're people with a basic grasp of economics. A person earning minimum wage has to spend all, or close to all, of their income on things that will be taxed with a consumption tax. A person with a comfortable middle class income will be able to spend maybe half of their income on taxable things and invest the rest. A wealthy person only spends a tiny fraction of their income. Therefore, the poorest a person is the higher a percentage of their income is paid with a consumption tax.

What do these poor people spend their money on that they'd be paying more in taxes? Food from groceries is exempt from taxes in many areas, as is clothing below a certain amount. Why couldn't other necessities be added to the list in a consumption tax system?

In places where this kind of system is set in place, where adjustments are made to help the poor, it ends up that the middle class pay a higher percentage of their income as tax than anyone else. Which isn't fair either.

And when they do, it's on stuff that is taxed much more aggressively than things like rent, food, and utilities. The rich guy is also paying, usually, mammoth amounts of property tax, and will usually have a very large chunk of his assets gobbled up as a death tax.

If you're worried about percentages, why aren't you proposing that all of the other things in life - not just the cost of having a government - are also "regressive" in the way you've chosed to describe things? A bag of chips at the store is also regressively priced, relative to income, isn't it? Outrageous! Unfair!

First, the oft-touted "47% of tax units pay no income taxes" statistic is wrong. 47% of tax units may not pay the Federal Income Tax, but any of them with any wage income at all DO pay the Federal Payroll Tax of 15.3% on every dollar earned up to about $100k. That's a tax on income.

That's a higher tax rate than the very wealthy pay on their investment / dividend / carried interest income.

As a matter of fact, I personally pay a federal tax rate of about 29%, double the tax rate paid by Mitt Romney.

I personally pay a federal tax rate of about 29%, double the tax rate paid by Mitt Romney

You're pretending that he didn't already pay the higher income tax rate on the money he earned and then risked in the investments that, if/when then make money, are once again taxed at the capital gains rate.

If you're really paying the rate you say you are, then you're making a tolerable living. Do you really have no investments of any kind? No 401? No IRA? Are you proposing that taxes are raised on such things? Maybe that's a good idea, since most of those dollars come out of your paycheck before you p

You're pretending that he didn't already pay the higher income tax rate on the money he earned and then risked in the investments that, if/when then make money, are once again taxed at the capital gains rate.

Mitt Romney NEVER paid the higher income tax rate. His initial earnings were as carried interest paid at the capital gains rate; he NEVER paid the regular income tax rate on those earnings.

Only after it has been substantially taxed. Regardless, your image of a cadre of cartoon-like rich-kid tax-evading villains is completely at odds with where most "rich" people come from. All of those Eeeevil people that the left says are the source of the deficit (by virtue of being under-taxed) are mostly dual-income professional families who did earn their way into Hated Rich People territory by making over $250,000 year.

But if it will make you feel better, how about we line up everyone who makes a mi

OK, so you hate people who've risked money making investments. We get that. But do you really think everyone else is so stupid to think you're saying anything of substance? Roughly 50% of the population earns money below the rate that the Congress has set as meaning they owe incomes taxes, and many of them receive "refunds" on money they don't even pay. They don't pay income taxes, they pay negative income taxes. A small number of rich people pay the vast majority of the country's income taxes, and middle class people pay the bits that are left over. The other half of people pay none. Of course you know that, and you're a troll.

OK, so you hate people who've risked money making investments. We get that. But do you really think everyone else is so stupid to think you're saying anything of substance? Roughly 50% of the population earns money below the rate that the Congress has set as meaning they owe incomes taxes, and many of them receive "refunds" on money they don't even pay. They don't pay income taxes, they pay negative income taxes. A small number of rich people pay the vast majority of the country's income taxes, and middle class people pay the bits that are left over. The other half of people pay none. Of course you know that, and you're a troll.

That 50% figure is dramatically misleading. First, it includes things like high school and college students who work part time and earn a pittance. And it also includes retirees who are not in the workforce. You can argue that even those people should pay income taxes, but the perception of a permanent 50% underclass that never pays taxes is absurd. Most taxpayers will not pay income taxes at both the start of their career and after retirement. I can't find the cite now, but I remember reading that sim

Consumption taxes are not inherently simpler than income taxes. The core reason behind conservatives arguing constantly for a flat consumption tax is that they are tired of progressive taxes and really would prefer taxes to be regressive. It has very little to do with the IRS or your plight.

I had a back and forth, about taxes, in another thread with a/.er whose rebuttal was"The founding fathers didn't institute a progressive income tax"

The fact is, consumption taxes (and/or tariffs) were enough to support the Federal Government's expenditures for the first ~85 years of its existence.Now, a universal flat tax is just a massive giveaway to the richest Americans and a massive taking from those least able to afford it.Not even Hermain Cain's 9-9-9 survived as a universal flat tax. [wsj.com]

- I am just going to respond to this, the rest I won't touch with you.

Consumption taxes are not just 'inherently simpler' than income taxes, they are infinitely simpler for the consumers.

What does one have to do to file taxes? At the minimum buy a software package and install it on a computer (so must own and operate a computer) and then go over forms, but this means having to pull out various papers collected over the year (or more than one year), receipts, statements, payslips, etc.

You are right to say that a flat sales tax is simpler than a progressive income tax (and probably that was what the OP was talking about). I just want to point out that consumption tax can, indeed, be more complex than income tax. If you implement a consumption tax similar to Canada's "Goods and Services Tax", everything is taxed at every stage through the process. It is impossible for the consumer to know what percentage of the price is tax.

If you implement a consumption tax similar to Canada's "Goods and Services Tax", everything is taxed at every stage through the process. It is impossible for the consumer to know what percentage of the price is tax.

- it is a compound tax, but to the consumer every step in the process does not matter, the simplicity of not bothering with collecting all of the papers over the year and then having to FILE a tax form and not really knowing what is going to happen - will you really owe a tax or be paid something back or will you really be audited and then you are on a 'black list' for at least 4 years, and they will go over the last 7-8 years of your tax returns and your spending, receipts, etc. This is a nightmare.

... but on production side they would still be untouched and the government couldn't grow based on percentage of their production and work, only on percentage of what they are willing to spend on taxable goods.

If you implement a consumption tax similar to Canada's "Goods and Services Tax", everything is taxed at every stage through the process. It is impossible for the consumer to know what percentage of the price is tax.

Here is an example. A farmer produces wheat and sells it to a distributor. The distributor pays 10% flat tax. The distributor then sells the wheat to a mill. The mill pays 10% tax (including 10% of tax that the distributor paid). The mill sells flour to another distributor. The distributor pays 10% tax (including 10% of the tax that the mill paid), etc.

GST is not a compound tax, it's a value added tax. Every bill that I pay gets split into two accounts - a "GST paid" asset account and an expense account. Every invoice I collect is split to a revenue account and a "GST collected" liability account. At the end of the period, I simply remit the difference between the two GST accounts.

I didn't say our current tax system is as simple as the Fair Tax or any other specific consumption tax proposal. I said that consumption taxes aren't inherently simpler than income taxes. Even a progressive income tax isn't really more complicated. If, for instance, or tax system had the same progressive tax structure as it does now, only exactly 0 tax breaks or deductions were allowed, it would be more simple than even a completely flat tax in my eyes, because you could calculate your tax burden once per y

Again, if individuals do not have to file any papers, do not have to keep track of any papers, it immediately is INFINITELY easier for them than having to do any of it.

Store is a business. They already have to keep track of their paperwork just to know what's going on in the business, keeping track of accounting, receivables, payables, everything, taxes are a small part of what stores do anyway for profit.

People do not do accounting like that for profit, they only do any of it because the government forces

Businesses already provide a W-2 for full time employees. In fact, if you are a single income earner household without any reductions, paying taxes already takes virtually no time. You don't have to spend time or money on an accountant.

I really love that you keep trying to compare a mythical consumption tax with an actual tax system, too. I've gotten to work with real world sales taxes before, and they aren't all that you guys crack them up to be. I've worked at a small rural ISP (10 or so employees), an

I bet he won't be punished NEARLY as bad as the megaupload guy. Such bullshit.

How can you get so angry at something you speculate is going to happen?

But there's no need to bet, it's in the fucking summary. 105 weeks in prison, after a guilty plea. The megaupload guy is fighting it, which means he might get off entirely, or they might slam him, so the two sentences won't be comparable.

You know, as much as I would not like to waste 2 years of my life in prison, I think I'd be even more worried about the rest of my life, as a felony convict. In these days of less-than-full employment, it's not like you can just rider over the next horizon and start over. Convicted felons are truly screwed for life employment-wise. They can't even get food stamps.

Say they stopped at $6 million. That is enough to get a new false identity or move to a country without extradition. After watching Top Gear I'd settle on Vietnam. Looks beautiful and friendly and has no diplomatic or extradition treaties.

The best criminals are smart enough to make it look like a crime never occurred, and there are probably a fair number of these (not an extraordinary number, there are lucrative "honest" lines of work for smart people). This guy probably though he could pull that off.

The article isn't too explicit on the details, but it sounds like he used his position and expertise to identify 29 people who were [dumber: weren't] eligible but didn't file [dumber: yet] for substantial tax returns. Then, he used the data

This is the perfect crime for an early season of the Sopranos, which featured several episodes where "degenerate" businessmen engaged in acts of crime they couldn't refuse. One involved an executive at an HMO, another involved a sporting gear franchise. Difference is that the screenwriters probably weren't bold enough to make this one up.

And, for those wanting his head, it wasn't a horrible crime. It's stealing, since it's not his money, but the victim is hard to identify...

[W]hat is required to live that way, doesn't require twenty hours of schooling. It requires many years of continuous reinforcement in order to build the character to produce the moral conviction behind a belief, but the beliefs themselves are pretty simple. Don't do stuff, don't do negative moral actions. Just don't do them; and just because nobody gets hurt, that doesn't mean you can do it, either. Because it's not about the person who is getting hurt or not hurt; it's about you. If you steal, even though nobody gets hurt, you are still a thief. So don't do it. Period. Don't even consider it. Don't even run it up the flagpole. That's not that complicated. And then secondly, if somebody says to you that you should do something that you know is wrong but it's okay to do it because there's this other good thing over here that you can make happen if you do otherwise, you need to realize that that is the language of a charlatan, that that is inappropriate, that you are being sucked in.

By the time you start rationalizing about the diffuse nature of the victim, moral laxity is already half-way up the flag pole.

David Rose knows your type:

The amount of cheating has never been zero, of course, but it has gone up dramatically in the last 25 years. Moreover, in the past when you asked students why they cheated and they explained why they cheated, they almost never excused the cheating; they never downplayed the moral import of it. They would say it was wrong but they had to do it. Today, though, increasingly--I don't remember the proportion but it's a shockingly high proportion--most of them report cheating at least once; and a shockingly high proportion of those who report cheating at least once say: What's the big deal? In other words, they make an argument that is very consistent with the absence of principled moral restraint. Because their argument is: I cheated; so what? Nobody got hurt. I didn't take anything from anybody. Nobody's worse off. Teacher's not worse off; I'm certainly not worse off; nobody in the class is worse off; what difference did it make? And the answer of course is, at that margin it makes no difference at all. But my point is that it's indicative of a shift in moral beliefs themselves, the way we organize our thoughts, and it's very frightening.

Hmm. I cheated once at school and it almost wrecked my future. I wasn't caught, and it sent me on a path that I wouldn't have gone down if I hadn't have cheated. I was taking a Chemistry exam aged 14 and due to overcrowding, the exam was in a regular classroom rather than the gym. The assistant music teacher was running the show and as he had really bad eyesight it was just too easy to look through books in my bag for answers. A month later, the results came out and I hit 90% - almost t

1. a lot of financial institutions would rather not it be public knowledge that they have problems in their security systems, etc. they try to hush things up without getting the cops involved.

2. the cops sometimes will collude with them to hush things up. see 'The Asylum' by Leah McGrath Goodman and NYMEX (yes, NYMEX from Trading Places)

3. at the highest echelon, the notion of what is legal and illegal gets distorted and fooled with, by lobbyists, payed-for intellectuals, and the super rich. so that to date there has been little-to-no prosecution of the people in the CDO, mortgage securities, robo signing, foreclosure fraud, and housing bubble system. experts and authors like Roger Lowenstein spill buckets of ink trying to prove that no crime took place, even though 2 trillion dollars magically disappeared into hedge funds and investment banks offshore accounts in 2008, with the help of the taxpayer.

4. take number 3 and just... multiply it. well. did you know, for example, that the guy who ran Nymex was, directly before he ran Nymex, the head government regulator of Nymex? And that he let Nymex do stuff that it shouldn't have been doing, and then they hired him out of his government job and gave him a huge raise? there are thousands of cases like that that never receive media attention.

in other words, people DO get away with that sort of thing, all the time.and the best way to get away with it is to have something like 'CEO' or 'Board Chairman' on your resume.

FWIW, being a lowly anonymous coward: I worked for large multinational bank, and low-level petty thieves in the system (trying to cash checks under stolen identities, steal money orders, etc.) are *always* dismissed without police prosecution. Furthermore, this is widely known amongst employees, some of whom attempt to take advantage of the PR-shy policy. But there are massive amounts of checks and balances between multiple departments and heavy security to try to guard against loss as much as possible, ma

You kind of answered your own question, hoss. It's not like murder, where someone doesn't show up to work and so police KNOW a crime has been committed: financial crimes are successful when the "victim" institution simply doesn't know the difference. It's especially the case where the amount being stolen is large on the scale of the individual, but small on the scale of the transaction/company ledger (i.e. an "office space" scam), which makes it easier for the ledger to be doctored, or at least for transact

I didn't say it never happens... it just seems to happen very rarely that people who break the law manage to do so with enough competence that, although you don't necessarily abide what they did, you can at least respect that they had definitely considered all the possible angles.

According to the DOJ, Richardson admitted that the tax returns were prepared without the authorization of the 58 taxpayers listed on the tax returns. All of the returns directed that the IRS pay the money to one of Richardson's bank accounts.

I imagine a red flag was automatically triggered by the 58 returns going to one bank account. As a side note, I know people who write code for the Federal government that checks for irregularities like this and they do that for a living 40 hours a week, so if you're going to try to scam the IRS you have to be at least a little clever.

I think you need to read that a little closer. It says bank accountS as in plural. Surprisingly a guy who was attempting to defraud the IRS from the inside was smart enough to open more than one account.

It also says "one of", which they could have just left out if they meant that the money went to multiple accounts. Regardless, triggering a red flag on 58 returns going to one account owner (as opposed to one account) is just as trivial.

The red flag might have been a single employee doing a particularly large (or small) number of returns or returns of the wrong general value, in a 2 day period. Granted at 59 returns it's 130k per return, but that would mean this guy happened upon 59 filings from the top 1% of wage earners (the top 1% in the US now is around 300k/year in income so for 2005 tax returns paying out 130k should be relatively rare, unless you work on those, and if you work on the ones with big money I'd expect you to get more

Maybe this doesn't exist in the US, but here we have places that advertise 'we do your taxes, you get your refund right away'. I assume that they do your taxes, give you the cash minus a fee, and set your refund to be deposited in their account. If that type of business exists then it wouldn't throw up any flags to have a bunch of returns done at once going to the same account.

Richardson used his inside knowledge of IRS operations to commit his crime,

So I wonder what aspect of "insider knowledge" he used? Logins and passwords? back doors? social engineering? test accounts? phone numbers to helpful clerks that don't think about what they're being asked to do? secret URLs?

Is there a back door that anyone with similar "insider knowledge" can use, that's not a hole that's closable with say a simple password change? (has the hole been closed?)

A little typo: I don't mean to imply that identity theft is a 'correction' of the IRS fraud, only that what IRS does on daily basis is fraud [slashdot.org] and this guy is just a small part of that entire fraudster operation.

Hypothetical, say you are a criminal, but want to avoid the fate of Al Capone and get busted for not paying your taxes. Can you use the capital gains rate if you have some sort of fraud that takes more than a year for the payoff?

The best would be some sort of crime that pays off after the statute of limitations, and you only have to pay the lower capital gains rate. Win Win Win!

The rulings are pretty self-consistent. You can even deduct the expenses for your illegal business:

"While embezzlers, thieves, and the like are forced to report their ill-gotten gains as income for tax purposes, they may also take deductions for costs relating to criminal activity. For example, in Commissioner v. Tellier, a taxpayer was found guilty of engaging in business activities that violated the Securities Act of 1933.[7] The taxpayer subsequently tried to deduct from his gross income the legal fees he spent while defending himself.[8] The Supreme Court held that the taxpayer was allowed to deduct the legal fees from his gross income because they meet the requirements of 162(a).[9], which allows the taxpayer to deduct all the “ordinary and necessary expenses paid or incurred during the taxable year in carrying on a trade or business.”[10] The Court reasoned (and the Internal Revenue Service did not contest the point) that it was ordinary and necessary for a person engaged in a business to expect to have legal fees associated with that business, even though such things may only happen once in a lifetime.[11] Therefore, the taxpayer in Tellier was allowed to deduct his legal fees from his gross income, even though he incurred the fees because of his crime. The Tellier court reiterated that the purpose of the tax code was to tax net income, not punish unlawful behavior.[12] The Court suggested that if this was not the case, Congress would change the tax code to include special tax rules for illegal conduct.[13]" -- https://en.wikipedia.org/wiki/Taxation_of_illegal_income_in_the_United_States [wikipedia.org]